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Also known as the project initiation document, the project charter is a high-level document created at the start of a project and referred to throughout the project's duration. It is the foundation of the project, a basis for how the project can evolve. The charter should state the purpose, main objectives and vision for a project.

Many project professionals may consider the project charter as 'more documentation' or a 'mere formality.' But the truth is that if they start to consider creating a charter as a best practice, many problems or issues can be eliminated.

However, I regularly meet project managers that manage their projects without referring to or even knowing the existence of their project's charter.

Why?

Here are some reasons a charter is left out, based on my experience:

Project management immaturity, lack of project approaches or poor project governance by the sponsor or organization. There's a lack of awareness for the need of a charter or formal authorization process.

At project initiation, there are no clear measurable objectives or reasons for the project. Hence, there is nothing to write.

The charter may have been written, but is filed away or lost within the organization's documentation system. This could be a symptom of high staff turnover or poor information systems.

Requirements and other changes to the project deemed the existing project charter obsolete.

The project has been initiated or is continuing without real executive commitment.

The project is considered too small or simple to be chartered, so writing a charter is considered a 'waste of time.'

A charter may exist but contains information that is rigid. Details, budgets and milestones may be unrealistic and unachievable, and therefore not referred to.

Alternatively, the metrics and information contained in the charter may be too broad and ambiguous and therefore not referred to.

However, without a charter, a project is headed for problems including:

Risk of diminished value and importance of a project, if its purpose and strategic benefit are not documented, agreed and formally recognized.

Delayed decision-making. Getting management and sponsors to sign off on things becomes difficult. There is no one to champion for the project and responsibility for it is passed around.

Difficulty managing expectations. Without a collectively agreed to charter, there may be frequent disruptions and disagreements from stakeholders. They will have differing intentions, opinions and understanding of the project's outcomes.

Risk of failure. When there is no clear, recorded statement of a project's goals, it's more prone to fail. The project charter includes the business case and other additions, which serves as a constant reminder of the project's vision, mission and critical success factors.

Lack of authority. The project manager will be plagued with problems from lack of authority to spend the budget, the ability to acquire and assign resources, and a general power needed to make day-to-day decisions and actions. This will also make it harder for the project manager to attract good suppliers, vendors and resources to work on the project. This can create a culture of dissatisfaction and apathy within the existing project team.

Subject to scrutiny, delay and bureaucracy. The project can expect numerous changes and deviations, which increase the risk of not delivering and reaching the projects goal. It could eventually become a financial burden to the organization.

Do you know of any other reasons why a project charter would not be created? How can the lack of a charter plague a project?

Great article. Thank you!
It's feasible to create project charter when a project is decided to be executed using traditional methodologies (e.g. waterfall) it's bcoz project committee and project managers know the scope and all other project related variables during project kick off . But when a project is running using agile method it's not viable to have project charter document upfront because team don't have adequate project details like scope, etc. upfront. I would love to hear from other readers on my thoughts.

Posted: Jan 3, 2013 5:06 AM

Richard Lincoln

A team without clear direction is a team headed for failure or at the very least inefficient execution. This should come as no surprise. Does that mean we need a charter?
Yes and no, we need to ensure project stakeholders (includes the team) understand the need for the project, the problem or opportunity, who has authority to make decisions, and any constraints. If these three things are not clear, the issues noted by Saira Karimon (author) are more likely to occur.
We are not talking about the scope of the project here but more about direction and guidelines. To be successful, the project must address a problem or opportunity that is of value to the business in a cost effective manner. I doubt this is possible without the above being clearly understood, which is typically achieved with a charter.
The charter is not the end of the process but rather the beginning. It is the launch pad, a set of broad guidelines to empower the team and set them in the right direction with an understanding of the boundaries within which they must execute.
As far as agile goes, we need to keep in mind agile is a development methodology not a project methodology. It governs one part of the overall project deliverables. If we are entering development sessions without knowing what problem or opportunity lies before us, not knowing who can make decisions, and no understanding of the time and cost limits, we are unlikely to succeed. How can we begin to talk about use cases without knowing which ones may be related to the problem or opportunity? How can we make decisions and tradeoffs in our development path without knowing cost, time, and other constraints?
On the latter, one could argue that the team needs to figure out what it will cost and when it can be done but a product that is too costly or too late will add little value to the business. The charter communicates these boundaries and challenges the team to achieve.
Formal or not, you need to set the direction and clarify the limits. If you follow the "if it is not documented, it did not happen" rule, then you need a documented charter. If not, you need to ensure the organization and project stakeholders understand what the project is going to deliver (solve a problem or harvest an opportunity), who directs the expenditure of resources (project manager), and what time, cost, and other constraints exist. You actually need both to be successful as a charter alone will not do the job alone.
Just my two cents, others?

Posted: Jan 5, 2013 1:03 PM

Saket Bansal , PMP ,PMI-ACP

In my view project charter is a valuable document irrespective of implementation methodology, even in agile we do have vision and constraints in place during the beginning of the project.
Charter is not a detail document, it does not give complete project scope, it exists to communicate stakeholders / sponsor expectations from the projects to project team.
In my view charter is never left out but sometime it is not well documented, any project we do can only happen when we get approval or authority from our project initiators.

Based on my experience running with different projects, a Project Charter is very helpful to establish what the overall objective of the Project is. It does not matter if you are using Waterfall or Agile methodologies, this document will always be useful as a reference why a Project is supposed to achieve and why....if this information is not available, why to have a Project in the first place, right?